Mike Ott: I realized similarities between navigating moguls and trading while skiing last
weekend in Colorado. When skiing the moguls, you must be fairly advanced, and have
good equipment. Obviously, this is true in trading. Most skiers stop at the
top of a mogul field to plan their descent, but foolhardy skiers fly right in,
and decide on the run. This is a parallel to speculators who study and prepare
vs. traders who live by the seat of their pants. Many factors must be considered
when picking a line down a mogul field. First, your line should be as straight as possible, but never exactly straight, because it will ruin your knees. Second,
never cross a mogul at its highest point; try to cross it halfway up. Use the
elevation to change directions in midair, and prepare for the next bump.
Much like chess, plan two or three moguls ahead, but be ready to skid
on an icy patch and discard that plan at a moment's notice. As the day
progresses, your legs tire, and what was possible in the morning may not apply
in the afternoon (ever-changing cycles). Finally, beware of beginners on the
same hill. They should stay out of your way, but their naivete could cause a
chain reaction which will definitely affect you.
Peter R. Gardiner: I have skied with some of the best mogul skiers in
the world, and my observation is that there are many many lines ranging
from straight zipper to balletic cross hill swings; they don't plan their lines at
all, except in competition, and go very much by feel, intuition, and
kinesthetic sense (just as they do skiing in a blizzard or white out);
they don't plan all their turns at all, but look only to the very next
one; turns on moguls can occur in fact everywhere from straight over
the top to around the lower incline, depending upon angle and speed.
Given that, the analogy to the value of intuition in trading is exactly
opposite: it is critical - otherwise anyone with a computer and a data
mine would be a constant winner - something I haven't seen.
Geoff Godard: From an old mogul hound - the guys who fly right in are the ones who studied
the line carefully during several previous runs - so know the territory - and leave the rest behind.
Duncan Coker: I can relate to this, having spent a few
seasons in the "bumps" of Telluride,
CO. There are some master bump skiers there, and I can pass on their advice
along with some of my own:
When skiing the moguls think about absorbing and extending. It is like
peddling a bicycle backward. You should never lose contact with the snow.
You must be ready to absorb some big movements in one's trade, even expect them
to go against for a while, absorb and extend.
As you said, always look ahead. In the bumps, you should be looking at least
two or three turns ahead. This is the only way you can maintain rhythm and
prepare. Once you stop looking ahead you will fall behind in your turns.
This leads to leaning back or "getting a beer from the back seat" turns. You
are done for at this point. In fact, everything about it is forward thinking,
hands forward, look forward, plan ahead, weight forward. In trading, all the
above apply. Keep looking ahead at what you think the market will do, not
behind at things like your entry point or P/L to date.
Point 'em! You have to point 'em down the fall line, your skis that is. Side
to side doesn't work. Don't slough into a trade. Enter and exit with
vigor.
Skiing bumps is about picking a line through them, and this involves looking
not at the moguls, but at the spaces between them. In trading it helps to
look at things inversely and counterintuitively.
My final advice to all mogul skiers comes from a friend, and it is to "Charge
like a rhino!" Of course bulls and bear can charge, too.
…And
to Motocross
James Lackey: In motocross they are called whoopdedoos, whoops for short. Well after some
very intense practice I have found a fast line through the whoops. The key is
to look ahead, where you intend on exiting the whoop section. You stand in a
crouched jockey position, 3rd gear about half throttle. When your shoulders and
wrists are square, the throttle automatically opens to full throttle when the nose
of the motorcycle dips and to closed throttle during a wheelie. It is also
important to keep right foot centered and the rear brake will be applied during
a wheelie situation as well. However, your left foot must be open, not to up or
downshift during this 50 meter body jarring, kidney bruising section of the
course.
I was very excited to hit the trails this afternoon. A cold front is hitting
Florida. It has been too hot to ride, 90 degree days. It just rained, so I
thought the cold front was here. The second I hit the trail, the sun broke and
it was hot as hades. I was in full battle dress uniform, racing pants, boots,
shoulder pads, kidney belt, helmet goggles and gloves.
I hit the first turn full blast, 60 mph slam-on-braking to to 5mph, down to
1st gear. I power shifted into second and hit a slick spot on the track exiting
the hairpin turn. The rear wheel slid an immediate 180 degrees. My left foot
was caught on a rock, my right trapped under the handlebars. I did the splits
and fell backwards with my left leg trapped under my fat behind. Mean while the
bike spun around to complete a 360 as the back wheel was still pushing and about
took my head off.
I reached up to hit the kill switch as the engine was revving a zillion rpms. I
realized that I could not breathe. I knocked the wind out of myself. The next
thought is what is broken. It is very important to get up, get the bike started
and ride for help before you go into shock. Fortunately, I only strained my
groin and hip and nothing was broke. It is so difficult to start a bike with a
broken right leg or to get moving with a broken left wrist, the clutch hand.
When I get full of mud and exhaustion from the workout, I always think of some
good trading ideas. This time is no different. It is very important not to
ride alone. As it is important not to trade alone. In case you are wounded in
a panic it is good to have a friend access the current situation. He can even
phone for help.
Another was when racing dirt bikes, I always walk the track early on foot,
except today. This way you can see any buried boulder, like I hit today and
lost traction and spun out. It is good to get up bright and early in the
morning. Be prepared for the trading day at least 1 hour, preferably 2 hours
before the open.
Next, pick several lines through the whoop section. After a few laps there will
be ruts and crashed riders in your preferred line. Always have an different
route to escape or pass. In trading I call it the fantasy island patterns.
They are a fantasy, because I have lost all feel for the markets. I guess I
never had it, because after testing, all of my mumbo feel came back is totally
inaccurate.
The fantasy trade is I buy the low tick of the day, the market promptly rallies
and I exit the high print. That is always the goal. However, the reality of the
situation is there are many different lines to take in a trading day. It is
important to understand that anything can happen. However the probability is
for just a few things to happen. I'll be damned if it is usually what I did not
think of and test, but something close and I lose more than I should.
When I was an amateur racer, I would always practice from the best line or
starting position. I would never attempt the triples or the hairy section of
the whoops during practice. I was too afraid of injury. I knew that I often
started the race from the lead or a good hole-shot start. I had no ability to
come from behind.
Later when I became an "A rider" or expert ranking I realized that I had the
Lackey luck. My dad calculated that every national event I had overwhelming
odds of drawing an outside starting position, by a card draw lottery, a huge
disadvantage. Either that or someone would fall onto my back wheel and knock my
down in the first turn, like what happened to me while leading the world
championships. My dad said son, the only way you are ever going to win is to
assume you draw the worst gate position, have a bad start, crash in the first
turn and still have the ability to come back and win.
In trading some are so damn afraid of losing, they never risk to win. However I
take on way too much foolish risk. Last month I was riding along fine and went
for a big pass at the end of the month and crashed. I made an amateurish
mistake and lost all. However, it was not being aggressive that was the
mistake, being wrong and crashing was.
Instead of quitting while ahead, it is best to pick the best race to
participate. After a long year of chasing points to win a state championship it
dawned on us to forget about riding with a #1 plate on my bike. If you are
state champion, you get to wear a number 1 on your bike all season long.
Sometimes I would race 5 times a week. Wednesday night, Friday, Sat and again
Sat night then on Sunday. when the monthly national events would occur we would
travel sometime 12 hours by van, then race and return by 7 am Monday and go
strait to high school.
I feel the same way today. Trading all day, watching war coverage all night
long only to be dissapointed during the big event, the monthly P&L. I learned
later only to race the big national events. Also only the events where the best
in the country raced and a track that suited my natural abilities.
There are certain daily patterns that work well. Moreover they fit my
personality and I can get very aggressive quickly. If they fail, I do not get
upset. That is part of the game. However there are days and patterns that I
dislike. When they fail I am injured. Then a good pattern comes up and I am
not as aggressive as I should be. Like today after my bike crash. I got right
back up and hit the whoops too fast, threw off my timing and I about went over
the handlebars. The next lap I was too slow and it really hurt my gizzards from
the shock of smacking the whoops.
To me that is what is worst of all, taking it easy. Only to watch the snp rally
20 handles and I am long 1 e-mini, trying to be careful. Not making, not
winning is worse than losing. That is what no-one understands.
As a day trader I was a B rider, an amateur. I never lost big. I was so proud
of myself for not losing in 2001 when everyone I knew got blasted. However that
is the way an amateur thinks, a sure loser. It is winning and big, when the
time is right that is important. That is the only was to beat the vig in
trading. You can go without losing for years in this game and still die broke.
Not to mention that this game is filled with land mines and annual disasters
waiting to happen to anyone who speculates for a living.
If your sole business is that of speculation there is only one way to end up a
champion in my book. Learn all you can and have the knowledge to be a champion.
Prepare for disaster on a daily basis. Trade when you have an edge, big
expectation and go for the win. Do not mess around with the locals, literally
and ride one for fun.
Set yourself a path for victory or death and go full throttle. Trading, like
motocross sooner or later you will crash and have a severe injury. As we age we
do not heal as quickly as when we are young. Sooner or later the markets will
put you in a position that either you go all in, or fold. That is the essence
of texas holdem poker. No one can walk away unless he has lost all his chips or
is champion. That is the life of a gambler...LACK
I woke up today so sore I could barely walk. The pain
of loss or injury affects us in every way. I traded like a scared child afraid
of the dark side today. From a combination of physical pain of a dirt bike
crash and the emotional pain of an account fall March 31st.
My dad, worries about me. He said son aren't you getting a little old to be
trying to race dirt bikes again. How much longer can you take the stress of
trading.
Motocross racers are some of the best athletes in the world. It takes great
strength and endurance to ride. Even though I risk serious injury, I will be in
the best shape of my life again soon. Indeed an aggressive goal to train for.
That will add many years to my lifetime. It is much better than golf and
softball.
Trading is very stressful. However we have a shot of fortunes that will last a
lifetime. That is much better than washing dishes. I thought perhaps I missed
out. I could have been one of those embedded reporters, on a tank for Fox news.
However I was lucky the first war. Sometimes trading for a living really
hurts. However it much better than a life on a tank...LACK
Craig: So in essence the key really lies in knowing
when to put the pedal to the medal
and when to keep it in second gear. A problem we have all
faced. Lack brings up
a good point, and to use a racing analogy if you come into
the turn too hot
you're going to crash. However, if you know exactly where to
apply the brakes and
start dropping gears you will make it through OK and can apply the accelerator
until the next turn. The market mistress is very much like
the race course, have to
stay in the powerband of the vehicle BUT if you come in too
hot you crash, not
hot enough and you see everyone pass you by.
So what to do becomes the question,
am I coming in too hot here? Not hot enough?
It's like anything that is feared in life, and the markets
are driven by that
emotion as are the racetracks. I suppose that the answer is simple, experience.
The more you race the faster your
times, the more you trade the better the P/L.
The weak and slow are quickly weeded out, like in nature,
the thinning of the
herd starts with the weak. Let us just be persistent and
tenacious in our
efforts and with any luck at all we shall continue in this,
the best job in the
world, albeit one of the toughest.